The year has kicked off to a pos­i­tive start for prop­erty mar­ket, says Se­eff

Weekend Argus (Saturday Edition) - - PROPERTY -

THE AR­RIVAL of 2010 and the much an­tic­i­pated World Cup to­gether with the first signs that South Africa is mov­ing out of re­ces­sion bode well for the coun­try’s be­lea­guered prop­erty sec­tor over the next 12 months, says Sa­muel Se­eff, chair­man of Se­eff Prop­er­ties.

A “cau­tiously op­ti­mistic” Se­eff be­lieves this year will bring good news – in­creased de­mand for prop­erty, more sales, and con­ser­va­tive price in­creases.

“We will see more ac­tiv­ity and more de­mand which will trans­late into more sales pro­vided that banks keep their doors open to pro­vid­ing more fi­nance,” he says.

Looking back, Se­eff says from June 2007 the prop­erty sec­tor had had two years of bad news. The fall­out from the Na­tional Credit Act and more strin­gent lend­ing cri­te­ria, con­tin­ued hikes in in­ter­est rates, ris­ing inflation and the es­ca­lat­ing ef­fects of the global fi­nan­cial cri­sis dur­ing 2009 all con­trib­uted.

“De­mand for hous­ing slumped to low lev­els and prices dropped. This all af­fected liq­uid­ity and con­fi­dence and, as such, sen­ti­ment. The mar­ket re­acts to sen­ti­ment. Peo­ple are re­luc­tant to make long-term com­mit­ments,” he says.

Dur­ing last year’s eco­nomic cri­sis, banks tight­ened up on lend­ing, de­mand­ing larger de­posits and grant­ing fewer and fewer loans, which had had an ex­tremely neg­a­tive ef­fect on sales, ac­cord­ing to Se­eff.

As a re­sult, the full im­pact of in­ter­est rate re­duc­tions that be­gan in 2008 and con­tin­ued to Au­gust 2009 are yet to be felt.

He says the ini­tial in­ter­est rate cuts took about five months to be­gin to fil­ter down into the mar­ket. Ac­tiv­ity lev­els and turnovers re­mained way off those recorded dur­ing the prop­erty boom of three years ago and pos­i­tives are yet to in­crease buyer ac­tiv­ity to the point where there is no longer sur­plus stock.

Only once de­mand ex­ceeds sup­ply can we ex­pect a rapid in­crease in prop­erty prices.

Un­til that hap­pens, growth will be min­i­mal, he says.

“Over­all, we be­lieve the World

2010 will bring more ac­tiv­ity re­sult­ing in more prop­erty sales

Cup will have a pos­i­tive ef­fect on sen­ti­ment rather than ac­tual sales. The real ef­fect may only be felt in 2011. By plac­ing South Africa in the spot­light, the event will open up the coun­try to po­ten­tial in­vestors and buy­ers who can­not help but recog­nise that there is sig­nif­i­cant value in the cos­mopoli­tan life­style we of­fer, when com­pared to Euro­pean des­ti­na­tions.

“Lux­ury homes and vil­las in the world-renowned ar­eas of Camps Bay, Bantry Bay and Clifton, as well as apart­ments and pent­houses at the equally en­vi­able V&A Water­front still of­fer out­stand­ing value for the many over­seas vis­i­tors who find South Africa an ap­peal­ing hol­i­day des­ti­na­tion. We have just sold a Camps Bay villa for the high­est price ever fetched in that area, to a Euro­pean ex­ec­u­tive. He was in Cape Town for the draw last year, looking for some­where to rent for the du­ra­tion of the tour­na­ment. On ex­pe­ri­enc­ing Cape Town for a few days, he de­cided to buy here in­stead.”

Se­eff says coastal prop­erty gems are not re­stricted to the platinum strip – you can buy a four-bed­room man­sion along­side the links at Sun­set Beach on the west­ern seaboard coast­line, which of­fers post­card views of Ta­ble Moun­tain and the ocean, for be­tween R10 and R12 mil­lion. And equally out­stand­ing homes are to be found in the coastal towns of Hout Bay and False Bay.

Se­eff says that in July, Se­eff Prop­er­ties recorded its best per­for- mance year on year since March 2008.

“The group’s July 2009 sales fig­ures were up 30 per­cent from July 2008. This per­for­mance proved sus­tain­able and turnover in­creased by 107 per­cent in Oc­to­ber 2009, when 133 per­cent more units were sold than dur­ing Oc­to­ber 2008.

“With in­creased sales ac­tiv­ity and banks eas­ing up on the loan to value cri­te­ria, the prop­erty mar­ket will be a lot stronger this year,” Se­eff says. “One real pos­i­tive that has emerged from all the neg­a­tiv­ity is that buy­ers and sell­ers have be­come more aware of prop­erty mar­ket con­di­tions and the true value of their as­sets.”

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